Eight Arrested in Mortgage Scam

Eight people were arrested Wednesday for running a fraudulent mortgage scheme that cost lenders more than $11 million.

Jose “Joe” Garcia of Camarillo, the accused leader of the conspiracy, was co-owner of New Concepts Home Loans in Oxnard.

The indictment charges that the company filed loan applications on behalf of lower-income, primarily Spanish-speaking individuals, generating loan fees and commissions of about $10,000 for each loan. Allegedly, the company prepared the applications with false information about the borrowers’ income, employment and assets. Some of the applications even included bogus letters from accountants.

When the loans went into default and the homes in foreclosure, lenders lost millions. Victims of the scam included Wells Fargo Bank, Countrywide Bank, IndyMac Bank, SunTrust Bank, World Savings Bank and JPMorgan Chase Bank.

“Jose Garcia and his cohorts are alleged to have lured unsophisticated borrowers with promises of putting them into homes they clearly could not afford,” André Birotte Jr., U.S. attorney for Central California, said in a statement. “But this American dream quickly turned into a nightmare for these borrowers when they realized they could not afford their new homes. All the while, real estate professionals like Jose Garcia reaped huge profits from the fraudulent loans that they brokered.”

The eight individuals are residents of Camarillo, Oxnard, Santa Paula and Moreno Valley. If convicted, all eight face a maximum sentence of 30 years in prison.